Technology in the Mid-Market

Perspectives

Technology in the Mid-Market

Perspectives and Priorities

Business growth. Competitive advantage. Enterprise success. These are goals shared by companies of all sizes. Among mid-market companies, there is increasing recognition of the pivotal role that technology can play in achieving these goals.

Executive summary

Results from Deloitte’s second annual mid-market technology survey show that cloud computing, which provides capabilities similar to those historically enjoyed only by larger corporations, is playing an even greater role in customer-facing operations. A growing number of firms are investigating and employing cloud solutions for their sales and customer management business functions. Expanded technology budgets also are funding mobile platforms that create real-time interactions with customers, as well as business analytics tools that provide insights and bolster the sales and marketing functions.

Several predominant themes emerged through an analysis of survey responses from 500 corporate executives:

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Increasing optimism

Eighty-two percent of respondents expressed a level of optimism about their companies’ business outlook over the next 12 months. Along with this general optimism, more than half report plans for increased spending on technology. Executives in this segment are generally confident in their knowledge of their organisations’ information technology situation and needs and are collaborating with IT leaders to drive execution of technology strategies. 

Technology as a strategic imperative

This year’s survey findings also confirm that mid-market companies’ view of technology is increasingly enthusiastic. Forty-one percent of respondents say their leadership views technology as a “critical differentiator and key to growth,” while another 38 percent view it as “a strategic investment.” Fewer organisations now view technology as simply “necessary” or foundational and as a result, more companies are using technology as a means to increase the top and bottom lines and to meet the needs of both the workforce and the customer. 

Our survey also reveals that many companies are embracing change and expressing a healthy appetite for innovation. Thirty-six percent of respondents are dedicating at least half of their IT budgets to implementation of new technology versus maintenance of existing systems. The sentiment is even more pronounced among private equity-owned firms. Among this subset of companies, 45 percent of executives say they direct at least half of their IT spending toward investment in innovation, suggesting a considerable degree of confidence in the potential of new technologies among investors backing these firms. 

Challenges remain

While it is an exciting time for mid-market companies as they adopt new technologies, the environment is not without challenges. Almost one-quarter of respondents report that it is difficult to keep up with the rapid pace of change in the technology landscape. Others seem overwhelmed by the prospect of diving into the data their organisations produce and question whether they will be able to uncover and take advantage of meaningful insights.

Twenty-seven percent of respondents cite the challenges of dealing with unstructured data versus structured data as the biggest hurdle in using analytics. And, as in last year’s survey, about one-third of respondents expressed continuing concerns about the security of the data and services provided by cloud-based solutions. 

The survey findings highlight some behaviors that illustrate additional challenges and potential cause for concern. One in five respondents say information security has had the most significant technological impact on their organisations 3over the last 12 months. About four in 10 respondents believe they haven’t taken adequate steps to ensure their companies are prepared for cyber-attacks. This is a prominent concern as exposures can cause irreparable harm to companies of any size. 

What happens next?

It is clear from our survey findings that companies that embrace technology and have supportive leaders with a bias toward action are positioned to capitalize on the results. Based on current market trends, the pace of innovation and change most likely will continue to accelerate.

For mid-market companies, decisions about what happens next can be shaped by a technology strategy that is forward-looking and considers the opportunities that technology can provide to help increase operational efficiency, boost productivity, and provide better connectivity with customers. 

About the survey

From April 28, 2014 to May 29, 2014, a Deloitte survey of mid-market companies was conducted by OnResearch, a market research firm. The survey examined technology trends taking place in this market segment to determine the role and value that technology plays and how it influences business decisions.

The 500 survey respondents represented mid-market companies with annual revenues ranging from $100 million to more than $1 billion. Half of the respondents were C-suite executives, while the remaining 50 percent held other management roles.

One third of the respondents were from consumer and industrial product companies, with the remainder divided among energy and resources; financial services; life sciences and health care; technology, media and communications; and other industries.

The full survey results are included in this report; some percentages in the charts may not add to 100 percent due to rounding, or for questions where survey participants had the option to choose multiple responses.

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